Conflict of Interest

What is a Conflict of Interest?

As a credit licensee, Connective is required to ensure consumers are not disadvantaged by any conflict of interest that may arise wholly or partly in relation to the credit activities which you engage in.

A conflict of interest occurs where the legal obligation you owe a client is inconsistent with your interests. Conflicts can be actual or potential, depending on the circumstances. Sometimes there may be no actual conflict, only the appearance of a conflict.

You don't have to avoid all conflicts of interests, but you must have adequate arrangements to manage them. It is important to ensure there is no misleading or deceptive conduct, and that offers of secret commissions are not accepted.

Conflict of Interest examples

Dealing with a consumer for a transaction where you have a vested interest in both outcomes, such as selling real estate and providing the mortgage broking service.

Accepting gifts from people you do business with, such as referral sources.

Purchasing or transacting in goods or services with family members or close relatives, such as facilitating their loan.

Managing a Conflict of Interest

Any actual, potential or perceived conflict of interest must be disclosed in writing to the client and managed. If it cannot be sufficiently managed, it must be avoided.The process of managing conflicts of interest should include:

Having a written policy which records actual, potential or perceived conflict of interests.

Disclosing it in a timely manner and before providing your services.

Making it specific to the client. Describe the conflict and explain how it applies to them.

A simple and clear explanation so they understand the conflict and its potential impact on them.

Providing sufficient information about your interest.

Providing disclosure of remuneration, any financial, direct or other interests you have or any associations or relationships you have.

Keeping clear and concise notes around how and when you disclosed the conflict of interest, noting any evidence that can support you should there be an issue in the future.

Avoiding and declining your services where the conflict of interest cannot be sufficiently managed.